Bond Market Update

Opening Advance Reversed

• U.S. Treasuries have reversed from highs that were reached during their opening jump, which pressured the 10-yr yield to 3.67%, its lowest level since early June 2023, while the 2-yr yield hit 3.65%, its lowest level since March 2023. The opening surge that was paced by the short end briefly uninverted the 2s10s spread, but that spread has inverted once again as Treasuries slipped from their early highs. The pullback has been assisted by the release of the ISM Non-Manufacturing Index for July (51.4%; Briefing.com consensus 52.5%), which showed a return to expansion. Equities are off to a sharply lower start, but they are trying to claw back some of their losses with the S&P 500 down 3.0% while the Nasdaq (-3.7%) underperforms.
• Yield Check:
  • 2-yr: -1 bp to 3.86%
  • 3-yr: UNCH at 3.70%
  • 5-yr: -1 bp to 3.61%
  • 10-yr: -2 bps to 3.77%
  • 30-yr: -3 bps to 4.08%